India, July 17 -- There was a common refrain in Indian fintech a few years ago: "As a fintech startup, you eventually pivot to lending because that is how one makes money." All that has changed now.

Startups enabling billions of digital transactions (UPI) were not earning much from payments, due to zero MDR (merchant discount rate) imposed on UPI transactions of all ticket sizes. Lending was the first answer, but now, after many years, Indian fintech startups are looking at stock broking to break out of the revenue hole.

Building a lending layer on top of the existing mammoth UPI user base made sense around 2019 and 2020, especially when demand for personal and small business loans was high. The Reserve Bank allowed banks and NBFCs to l...